CIT Bondholders Agree To $3 Billion Emergency Loan

  • Playlist
  • Download
  • Embed
    Embed <iframe src="http://www.npr.org/player/embed/106795163/106795148" width="100%" height="290" frameborder="0" scrolling="no">
  • Transcript

CIT, a big lender to small and mid-size businesses around the country, was headed for bankruptcy, but its bondholders reportedly agreed Sunday to give it a $3 billion emergency loan. The government had refused to bail out the financial firm. The loan buys CIT some time but doesn't solve its problems.

STEVE INSKEEP, host:

NPR's business news starts with a financial rescue.

(Soundbite of music)

INSKEEP: This time the U.S. government is not involved. In fact, the government refused to bail out CIT. That's the financial firm that's a big lender to small and medium-sized businesses. CIT was headed for bankruptcy. But last night its bondholders reportedly agreed to give the a three billion dollar emergency loan. The loan comes with a hefty interest rate of 10-and-a-half percent. Not a bad deal for the bondholders, assuming CIT manages to pay it back. And while the loan buys CIT some time, it does not solve the company's problems. It still has to restructure its business and dig itself out from under all the subprime mortgage loans and other risky investments it made during the housing boom.

Copyright © 2009 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR’s programming is the audio.

Related NPR Stories

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.